Summary Bullets:
• Telstra Health has set ambitious revenue growth targets for FY2025, hoping to drive growth through developing new connected platforms cutting across the healthcare industry.
• There is opportunity for Telstra to work more closely with its healthcare subsidiary and leverage its edge, security and analytics capabilities to support Telstra Health’s goals and develop vertical solutions.
More than seven years ago Telstra invested in a new line of business as it looked to diversify revenues ahead of the launch of the NBN. This business, Telstra Health, has grown through the years to A$160 million in revenue for FY2021 ended June 30, 2021. This total does not include 2021 revenues from Telstra Health’s acquisition of medical practice management software provider Medical Director, nor its joint-venture (in which Telstra Health controls a majority stake) with medical budgeting and costing software provider Power Health. With recent acquisitions included, Telstra Health made A$250 million in FY2021. However, Telstra has even loftier goals for its health focused subsidiary; as announced at its Telstra Investor Day Part II, Telstra Health is targeting to double its revenue to FY2025, a goal of A$500 million.
The company, already one of Australia’s leading digital health services providers, is well positioned for growth. Over the years Telstra Health, through acquisition, organic growth including significant investment in its own IP, has grown to develop software, infrastructure, and services to serve a wide array of segments in the healthcare industry. Within Australia, Telstra Health caters to seven key segments: aged care and disability, hospitals and connected health (which includes its in-house developed Kyra electronic records platform), Pharmacy (which mainly consists of Fred IT, a 50/50 joint venture), population health, virtual care solutions, primary care (GPs), and community health (including a focus on indigenous communities). The company has a UK business and international clients in Asia, Middle East and North America through its Power Health joint venture. Telstra Health’s ambition now is to stitch the various platforms, software and services it provides, together in meaningful ways to develop platforms and services that offer interoperability between various segments of the healthcare industry. Further, Telstra has a stated goal of using data and analytics to provide further insight into patients and populations for better health outcomes delivered in a more efficient manner. There is certainly plenty of room for synergies across its market segments.
While Telstra Health is exploring the opportunities to develop cross industry platforms and solutions and build interoperability into its services, the company remains a fully separate entity. However, Telstra and Telstra Health have areas where deeper collaboration would make sense in the development of healthcare solutions, particularly around Telstra’s recently announced adaptive cloud and edge solutions as well with Telstra Purple’s cloud and data professional services capabilities. A good deal of Telstra Health’s business revolves around the digitization and migration to cloud of healthcare systems and records. Many of these systems and data are subject to strict regulatory requirements and require heightened data security, while other systems (e.g., POS software, or back-office functions) could benefit from the efficiency of public cloud deployments. Telstra’s Adaptive cloud, which will include public cloud and private cloud deployment options across customer edge, network edge, and centralized deployment, could offer an optimized way for Telstra Health to deploy its various platforms. This could be included alongside cybersecurity services from Telstra’s security practice. Telstra has stated it is trying to develop industry specific solutions to run on its edge and cloud platforms and a healthcare solution using Telstra Health’s broad portfolio could be a perfect fit. Beyond supporting the edge and cloud needs for healthcare, segments like remote clinics or large hospitals could benefit from Telstra’s 5G services to connect remote sites with reliable connectivity for imaging or telehealth, or providing private 5G to large hospitals. Telstra is also growing its capabilities for data and analysis, developing an internal data hub and entering into a joint venture with AI specialist Quantium. While Telstra Health may be poised for growth alone, there is plenty of upside for both the company and parent around deeper integration.
IT Connection 